Better Buses – the PTEs’ viewpoint

Tim LarnerDirector, pteg Support Unit

IPPR, June 2004

 Better Buses

Background

• Importance of buses in all seven PTE areas

• Concentration of operations with big 5 plcs

• Partnerships only partially successful in achieving policies

• Failure of deregulation in PTA areas – patronage decline

 Better Buses

UK Bus Patronage Trends

0

20

40

60

80

100

120

140

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02

Year

Ind

ex

(1

99

1/9

2=

10

0)

PTEs

London

Rest of GB

 Better Buses

Background

• Importance of buses in all seven PTE areas

• Concentration of operations with big 5 plcs

• Partnerships only partially successful in achieving policies

• Failure of deregulation in PTA areas – patronage decline

• Sustained real fare increases

• Contrast with London and rest of Europe

 Better Buses

Why PTEs want change

• PTEs provide bus companies with about one third of their

income

• Companies in PTE areas are generally highly profitable

• But poor quality services continue to reduce value to

users and undermine image

 Better Buses

Why PTEs want change

• Little or no real competition between bus companies in PTE areas

• Poor value for money from public funding of bus services

• Better co-ordination enables greater policy delivery - intra/inter-modal plus wider transport benefits

• Inherent conflict between commercial & public policy objectives

 Better Buses

Some inherent policy conflicts

• Vision - short-term commercial or long-run public?

• Long-term value of the market - grow or diversify out of?

• Pricing captive markets - exploit or protect?

• Marketing strategy - maximise share or increase size?

• Competition - seek to avoid or exploit to achieve vfm?

• Regulation - exploit ‘light-touch’ or assure service quality?

 Better Buses

What PTEs don’t want

• Return to pre-1986 provision of bus services, though ‘operator of last resort’ powers useful

• Across the board change - continue with partnerships where they deliver

 Better Buses

A new approach - franchised operations

• Consistent area-wide quality

• Network planning to deliver service integration

• Fully integrated ticketing

• Operator exclusivity following competition

• Comprehensive minimum standards with commercial

enhancement where appropriate

• Flexibility on size, character & length of contract

• Locally determined application

 Better Buses

Sources of funding

• Savings in administration - ticketing, tenders & concessions

• Keen competition for right to operate

• Some service rationalisation removing wasteful competition

• Increased patronage

• Some additional public funding

 Better Buses

Summary

• PTEs want a further ‘tool in the box’

• PTAs should have powers to specify networks and fares to meet the needs of their areas

• PTEs to offer bus service franchises to operators through tendering process to meet a general specification

• Bus operator(s) winning the franchise provided exclusive right to operate bus services in the area

• Greater funding - linked to policy delivery